A 30 y from 2022 with a face value of $1000 would roughly have a market value of $500 today...and vice versa, should the yield go down, say we go back to 2% in 2030, then $1000 in a 5% bond would have a market value of ~$2000.Say nothing happens, or the yield surge further.. You are still getting that 5% ROI on the face value, you don't have to sell, you can just enjoy a stable cashflow.
not buying your worthless dollars, mr. Bessent, you literal faggot.
I think this is a good investment, because from my perspective bond yields will go lower.1) None of the inflation seems to be structural in any way, it's fuelled by active decisions - tariffs, Hormuz, widening of the budget deficit.2) The economy really is bifurcated - this includes the labour market, and I think that a need will rise to adjust monetary policy to aid the lagging part of the economy, support the labour market.3) An extension of 2, if the AI bubble pop, rates will go lower. You cut rates during a recession to stimulate the economy.4) back to the 5% ROI.. If none of the above materialize, you are just stuck at a suboptimal investment, but 5% is not bad, especially because it is risk free.
I knew some dipshit that went all in on bonds in I think early 2023 because he thought stocks were topping and interest rates just had to go lower. Missed out on a lot of gains, but admittedly, the yield curve was inverted at the time.
rates will go higher this year, the impending oil crisis will see to thatdon't buy long-term bonds until they hit at least 6%
>>62349858>it's fuelled by active decisionsYeah, surely it has nothing to do with compounding debt where the interest payments alone will soon make up the #1 largest expenditure and is very obviously spiraling out of control and everyone in charge are sticking their heads in the sand, lmao
>>62349921Japan has a humongous debt, and it's interest rate is sub 1%...because what else could it be? no way they could ever make interest payment of 5%.The US will probably follow the same track, cut interest rate, force retirement funds to buy these shit-yielding-bonds.
>>62349916This is my thinking as well, i think 5% is interesting.. But we might get to 6-7%, think i will pull the trigger at these levels, close enough to the "10% average of the S&P", without any of the risk, and with the potential upside of x2.
>>62349961with the added upside that treasuries are exempt from all but federal taxes
>>62349840>say we go back to 2% in 2030not gonna happen so no point in saying it
>>62349961wouldn't go all in even at 6%, inflation will get really ugly in the next 30 years, you're better off diversifying
>>62349983people hate inflation more than unemployment, that was made clear by the voters globally after COVIDI think we'll get a Volcker Shock 2.0 and then budget austerity well before inflation gets out of hand again
>>62349840Trump is determined to increase inflation, therefore the bonds are sold because smart investors know, thus yields go up.Hoping those shitty ass bonds will go up is the most hopium shit ass trade I ever heard.
>>62350006Inflation is coming down, but yeah, we will probably see a couple more rate hikes for good measure..
>>62350103Core CPI is the wrong measure here, the oil supply shock is the main inflation driver, and will be for the forseeable future
>>62349858>rates will go lowerDoubt.
>>62350133yeah, think the Hormuz impact on oil will only worsen from here. A lot of the pressure on oil has been alleviated by strategic reserves (world wide)...and even if the strait "opens" within the next couple of months, the fallout will likely continue for the remainder of 2026.However, the core CPI is important because it shows inflation isn't structural, but event driven, temporarily - if you will.
>>62350179depends on your definition of "temporary"even if we somehow avoid the hyperbolic price spike that could occur at any moment once the market collectively decides reserves are too low, oil prices will remain elevated for a whileI'm hearing that the general estimate is that we'll need a week of normal supply for every day the strait has been closed so far, which would be almost two years at this point, and it just gets longer with each passing day
I learned about bonds recently.How the fuck are they considered a reliable and safe investment when a 1% interest rate over 20 years bond will result in 20% price decrease in your bond? it's basically a bet against inflation. There is no guarantee bonds won't be giving 8% interests one day. i guess it can go back down and prices will come back but if you bought bonds at 3.5% you're already fucked. bag holding for a 1% net profit after inflation each year. beyond cucked.
>>62350217only the most idiotic of fools bought long-term bonds back during ZIRP, no sane investor would do such a thing
>>62350228well, billions were sold so some people or institutions were buying? it was considered the giga safe play lmao
>>62350236people really thought interest rates were going to be super low forever, pure insanity
>>62349954>it's interest rate is sub 1%Uh, not any more
